Business Wire India
IT Services delivers strong revenue growth for the quarter at 8.1% QoQ and 28.8% YoY
Net Income & EPS showed a robust increase of 18.9% YoY and 23.8% YoY respectively
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) today announced financial results under International Financial Reporting Standards (IFRS) for the Quarter ended September 30, 2021.
Highlights of the Results
Results for the Quarter ended September 30, 2021:
Gross Revenue was Rs 196.7 billion ($2.7 billion1), an increase of 7.8% QoQ and 30.1% YoY
IT Services Segment Revenue was at $2,580.0 million, an increase of 6.9% QoQ and 29.5% YoY
Non-GAAP2 constant currency IT Services Segment Revenue increased by 8.1% QoQ and 28.8% YoY
IT Services Operating Margin3 for the quarter was at 17.8%, flat on adjusted4 basis QoQ and reported decrease of 104 bps QoQ
Net Income for the quarter was Rs 29.3 billion ($395.2 million1), an increase of 18.9% YoY
Earnings Per Share for the quarter was at Rs 5.36 ($0.071), an increase of 23.8% YoY
Performance for the quarter ended September 30, 2021
Thierry Delaporte, CEO and Managing Director said, “The Q2 results demonstrate that our business strategy is working well. We grew at over 4.5% organic sequential growth for a second quarter in a row, resulting in a 28% YoY growth in the first half of this financial year. I thank our customers, partners, and colleagues as we surpassed the $10Bn milestone of annualized revenue run rate.”
Jatin Dalal, Chief Financial Officer said, “We sustained our operating margins in Q2 in a narrow band even after absorbing the full impact of our recent acquisitions and investing significantly in our business across sales, capabilities and talent. We completed a salary increase covering 80% of our colleagues, making it the second hike in this calendar year. We delivered a robust growth in EPS of 23.8% YoY.”
Outlook for the quarter ending December 31, 2021
We expect Revenue from our IT Services business to be in the range of $2,631 million to $2,683 million*. This translates to a sequential growth of 2.0% to 4.0%.
*Outlook is based on the following exchange rates: GBP/USD at 1.36, Euro/USD at 1.17, AUD/USD at 0.72, USD/INR at 74.13 and CAD/USD at 0.78
IT Services
Wipro continued its momentum in winning large deals with our customers as described below:
Wipro has won a strategic, multi-year cloud migration and application modernization engagement with a leading North American financial institution to transform and migrate its enterprise applications across all lines of business. The engagement will lower total cost of ownership (TCO) and provide the bank with significant tools and intellectual property to modernize its processes and become more nimble.
Wipro has won a multi-year engagement with ABB Information Systems to provide digital workplace services for their 100,000+ employees spread over 100+ countries. Wipro will support and contribute to the transformation of ABB’s end-user infrastructure to enhance the consumer experience, leveraging industry-leading practices.
Wipro has won an engagement with a global healthcare company to consolidate and deliver member engagement services for various public assistance programs. The scope includes outreach, advocacy, retention services, as well as procuring and revival of patient’s health care records securely. Additionally, Wipro will guide dual eligible members on benefits and beneficiary protections.
Wipro has won a strategic, multi-year engagement with a leading North American financial institution to modernize and transform the Quality Engineering and Testing portfolio within their Retail and Commercial Banking segment to the new ways of working. The engagement will focus on Digital Transformation for enhanced customer experience and cost optimization.
Wipro has won an engagement with a US-based financial services organization to extend its capabilities into Infrastructure Operations and Engineering. The multi-year deal expands the partnership while driving greater productivity, increased delivery speed, and higher business value, ensuring a stable and modern IT Infrastructure.
Digital Services Highlights
We continue to see increasing traction in digital oriented and other strategic deals as illustrated below:
Wipro has won an engagement with a multinational electrical engineering and software company to transform their sales and marketing services across subsidiaries and affiliated companies spread over 55 countries. Wipro FullStride Cloud Services will develop and implement a cloud platform to empower the client with a single global view of their customer database.
Wipro has won a strategic engagement with a leading multinational financial services company in LATAM to accelerate their digital transformation journey. Wipro will deliver API and micro services based on Banking Industry Architecture Network model and modernize the bank’s direct and assisted customer channels.
A US-based software solutions company has selected Wipro to transfer their on-premise platforms to a SaaS-based business model. Wipro FullStride Cloud Services will modernize the client’s offerings using cloud native capabilities.
A global technology company has hired Designit to support the operation and management of 100+ social and blog channels as part of their B2B marketing program.
Analyst Recognition
Wipro was recognized as a Leader in Everest Group’s Application and Digital Services in Banking PEAK Matrix® Assessment 2021: Global Focus
Wipro was recognized as a Leader in Everest Group’s Network Transformation and Managed Services PEAK Matrix® Assessment 2021
Wipro was recognized as a Leader in Everest Group’s Data and Analytics (D&A) Services PEAK Matrix® Assessment 2021
Wipro was recognized as a Leader in Everest Group’s Capital Markets Operations – Services PEAK Matrix® Assessment 2021
Wipro was recognized as a Leader and Star Performer in Everest Group’s Finance and Accounting Outsourcing (FAO) – Service Provider Landscape with PEAK Matrix® Assessment 2021
Wipro was positioned as a Leader in IDC MarketScape: Worldwide Network Consulting Services 2021 Vendor Assessment (Doc #US48076121, Aug 2021)
Wipro was positioned as a Leader in IDC MarketScape: Asia/Pacific (Excluding Japan) Managed Cloud Services 2021 Vendor Assessment (Doc #AP47014921, Aug 2021)
Wipro was positioned as a Leader in IDC MarketScape: Worldwide Life Science R&D ITO Services 2021 Vendor Assessment (Doc #US47455021, Aug 2021)
Wipro was positioned as a Leader in IDC MarketScape: Worldwide Life Science R&D BPO Services 2021 Vendor Assessment (Doc #US48076121, Aug 2021)
Wipro was positioned as a Leader in IDC MarketScape: Worldwide Smart Manufacturing Service Providers 2021 Vendor Assessment (Doc #EUR147689021, Jun 2021)
Wipro was positioned as a Leader in 2021 ISG Provider Lens™ – SAP HANA Ecosystem Services 2021 – UK, US
Wipro was positioned as a Leader in 2021 ISG Provider Lens™ – Utilities Industry – Services and Solutions 2021 – North America
Wipro was featured in the Top Players in HFS Top 10: Banking and Financial Services 2021
Wipro was recognized as a Gartner Peer Insights Customers’ Choice for Data and Analytics Service Providers
Disclaimer: Gartner Peer Insights ‘Voice of the Customer’: Data and Analytics Service Providers, Peer Contributors, 19 August 2021. Gartner Peer Insights Customers’ Choice constitute the subjective opinions of individual end-user reviews, ratings, and data applied against a documented methodology; they neither represent the views of, nor constitute an endorsement by, Gartner or its affiliates.
IT Products
IT Products Segment Revenue for the quarter was Rs 1.9 billion ($25.5 million1)
IT Products Segment Results for the quarter was a profit of Rs 0.1 billion ($1.3 million1)
India business from State Run Enterprises (ISRE)
India SRE Segment Revenue for the quarter was Rs 1.9 billion ($25.2 million1)
India SRE Segment Results for the quarter was a profit of Rs 0.4 billion ($5.3 million1)
Please refer to the table at the end for reconciliation between IFRS IT Services Revenue and IT Services Revenue on a non-GAAP constant currency basis.
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. Such non-GAAP financial measures are measures of our historical or future performance, financial position or cash flows that are adjusted to exclude or include amounts that are excluded or included, as the case may be, from the most directly comparable financial measure calculated and presented in accordance with IFRS.
The table at the end provides IT Services Revenue on a constant currency basis, which is a non-GAAP financial measure that is calculated by translating IT Services Revenue from the current reporting period into U.S. dollars based on the currency conversion rate in effect for the prior reporting period. We refer to growth rates in constant currency so that business results may be viewed without the impact of fluctuations in foreign currency exchange rates, thereby facilitating period-to-period comparisons of our business performance. Further, in the normal course of business, we may divest a portion of our business which may not be strategic. We refer to the growth rates in both reported and constant currency adjusting for such divestments in order to represent the comparable growth rates.
This non-GAAP financial measure is not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, the most directly comparable financial measure calculated in accordance with IFRS and may be different from non-GAAP measures used by other companies. In addition to this non-GAAP measure, the financial statements prepared in accordance with IFRS and the reconciliation of these non-GAAP financial measures with the most directly comparable IFRS financial measure should be carefully evaluated.
Results for the quarter ended September 30, 2021, prepared under IFRS, along with individual business segment reports, are available in the Investors section of our website www.wipro.com
Quarterly Conference Call
We will hold an earnings conference call today at 07:15 p.m. Indian Standard Time (09:45 a.m. U.S. Eastern Time) to discuss our performance for the quarter. The audio from the conference call will be available online through a web-cast and can be accessed at the following link- https://links.ccwebcast.com/?EventId=WIP20211013
An audio recording of the management discussions and the question-and-answer session will be available online and will be accessible in the Investor Relations section of our website at www.wipro.com
About Wipro Limited
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO) is a leading global information technology, consulting and business process services company. We harness the power of cognitive computing, hyper-automation, robotics, cloud, analytics and emerging technologies to help our clients adapt to the digital world and make them successful. A company recognized globally for its comprehensive portfolio of services, strong commitment to sustainability and good corporate citizenship, we have over 220,000 dedicated employees serving clients across six continents. Together, we discover ideas and connect the dots to build a better and a bold new future.
Forward-Looking Statements
The forward-looking statements contained herein represent Wipro’s beliefs regarding future events, many of which are by their nature, inherently uncertain and outside Wipro’s control. Such statements include, but are not limited to, statements regarding Wipro’s growth prospects, its future financial operating results, and its plans, expectations and intentions. Wipro cautions readers that the forward-looking statements contained herein are subject to risks and uncertainties that could cause actual results to differ materially from the results anticipated by such statements. Such risks and uncertainties include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, complete proposed corporate actions, intense competition in IT services, our ability to maintain our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives, political instability, war, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our business and industry.
Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission, including, but not limited to, Annual Reports on Form 20-F. These filings are available at www.sec.gov. We may, from time to time, make additional written and oral forward-looking statements, including statements contained in the company’s filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statement that may be made from time to time by us or on our behalf.
For the convenience of the readers, the amounts in Indian Rupees in this release have been translated into United States Dollars at the certified foreign exchange rate of US$1 = Rs 74.16, as published by the Federal Reserve Board of Governors on September 30, 2021. However, the realized exchange rate in our IT Services business segment for the quarter ended September 30, 2021 was US$1= Rs 75.11
Constant currency revenue for a period is the product of volumes in that period times the average actual exchange rate of the corresponding comparative period
IT Services Operating Margin refers to Segment Results Total as reflected in IFRS financials
IT Services Operating Margin change has been adjusted for one time gains in ‘other operating income’ in Q1’22 for Rs 2,150 million
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Rs in millions, except share and per share data, unless otherwise stated)
As at March 31, 2021
As at September 30, 2021
Convenience translation into US dollar in millions
Refer footnote 1
ASSETS
Goodwill
139,127
228,763
3,085
Intangible assets
13,085
42,808
577
Property, plant and equipment
85,192
88,813
1,198
Right-of-Use assets
16,420
18,305
247
Financial assets
Derivative assets
16
28
^
Investments
10,576
13,208
178
Trade receivables
4,358
4,378
59
Other financial assets
6,088
8,057
109
Investments accounted for using the equity method
1,464
698
9
Deferred tax assets
1,664
2,576
35
Non-current tax assets
14,323
10,740
145
Other non-current assets
15,935
11,668
157
Total non-current assets
308,248
430,042
5,799
Inventories
1,064
778
10
Financial assets
Derivative assets
4,064
4,308
58
Investments
175,707
175,223
2,363
Cash and cash equivalents
169,793
142,026
1,915
Trade receivables
94,298
108,507
1,463
Unbilled receivables
27,124
38,375
517
Other financial assets
7,245
10,495
142
Contract assets
16,507
20,467
276
Current tax assets
2,461
4,717
64
Other current assets
24,923
27,199
367
Total current assets
523,186
532,095
7,175
TOTAL ASSETS
831,434
962,137
12,974
EQUITY
Share capital
10,958
10,962
148
Share premium
714
1,164
16
Retained earnings
466,692
526,654
7,102
Share-based payment reserve
3,071
3,807
51
SEZ Re-investment reserve
41,154
43,237
583
Other components of equity
30,506
35,840
483
Equity attributable to the equity holders of the Company
553,095
621,664
8,383
Non-controlling interests
1,498
1,088
15
TOTAL EQUITY
554,593
622,752
8,398
LIABILITIES
Financial liabilities
Loans and borrowings
7,458
55,319
746
Lease liabilities
13,513
15,283
206
Other financial liabilities
2,291
2,326
31
Deferred tax liabilities
4,633
14,902
201
Non-current tax liabilities
11,069
11,415
154
Other non-current liabilities
7,835
8,871
120
Provisions
2
1
^
Total non-current liabilities
46,801
108,117
1,458
Financial liabilities
Loans, borrowings and bank overdrafts
75,874
58,910
794
Derivative liabilities
1,070
432
6
Trade payables and accrued expenses
78,870
90,782
1,225
Lease liabilities
7,669
8,697
117
Other financial liabilities
1,470
4,106
55
Contract liabilities
22,535
21,577
291
Current tax liabilities
17,324
19,385
261
Other current liabilities
24,552
26,512
357
Provisions
676
867
12
Total current liabilities
230,040
231,268
3,118
TOTAL LIABILITIES
276,841
339,385
4,576
TOTAL EQUITY AND LIABILITIES
831,434
962,137
12,974
^ Value is less than 1
WIPRO LIMITED AND SUBSIDIARIES
INTERIM CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Rs in millions, except share and per share data, unless otherwise stated)
Three months ended September 30,
Six months ended September 30,
2020
2021
2021
2020
2021
2021
Convenience translation into US dollar in millions
Refer footnote 1
Convenience translation into US dollar in millions
Refer footnote 1
Revenues
151,145
196,674
2,652
300,276
379,198
5,113
Cost of revenues
(105,387)
(137,562)
(1,855)
(209,087)
(265,129)
(3,575)
Gross profit
45,758
59,112
797
91,189
114,069
1,538
Selling and marketing expenses
(9,606)
(13,852)
(188)
(19,395)
(26,869)
(362)
General and administrative expenses
(8,177)
(11,288)
(152)
(18,183)
(21,818)
(294)
Foreign exchange gains/(losses), net
338
933
13
1,543
2,093
28
Other operating income/(loss), net
(178)
15
^
(81)
2,165
29
Results from operating activities
28,135
34,920
470
55,073
69,640
939
Finance expenses
(1,267)
(1,459)
(20)
(2,566)
(2,205)
(30)
Finance and other income
5,209
4,114
55
10,490
8,733
118
Share of net profit/ (loss) of associates accounted for using the equity method
(6)
(10)
^
25
(3)
^
Profit before tax
32,071
37,565
505
63,022
76,165
1,027
Income tax expense
(7,228)
(8,259)
(111)
(14,066)
(14,484)
(195)
Profit for the period
24,843
29,306
394
48,956
61,681
832
Profit attributable to:
Equity holders of the Company
24,656
29,307
394
48,558
61,628
831
Non-controlling interests
187
(1)
^
398
53
1
Profit for the period
24,843
29,306
394
48,956
61,681
832
Earnings per equity share:
Attributable to equity holders of the Company
Basic
4.33
5.36
0.07
8.53
11.28
0.15
Diluted
4.32
5.35
0.07
8.51
11.25
0.15
Weighted average number of equity shares
used in computing earnings per equity share
Basic
5,694,035,551
5,464,831,135
5,464,831,135
5,693,689,502
5,464,021,919
5,464,021,919
Diluted
5,706,874,339
5,480,490,360
5,480,490,360
5,705,850,555
5,478,297,758
5,478,297,758
^ Value is less than 1
Additional Information:
Particulars
Three months ended
Six months ended
Year ended
September
30, 2021
June
30, 2021
September
30, 2020
September
30, 2021
September
30, 2020
March
31, 2021
Audited
Audited
Audited
Audited
Audited
Audited
Revenue
IT Services
Americas 1
53,205
49,683
43,954
102,888
86,566
178,091
Americas 2
59,260
55,105
44,450
114,365
88,644
179,821
Europe
58,619
54,461
38,510
113,080
77,454
165,441
APMEA
22,715
21,232
20,762
43,947
40,920
82,462
Total of IT Services
193,799
180,481
147,676
374,280
293,584
605,815
IT Products
1,894
1,311
1,699
3,205
4,005
7,685
ISRE
1,867
1,937
2,111
3,804
4,222
8,912
Reconciling Items
47
(45)
(3)
2
8
13
Total Revenue
197,607
183,684
151,483
381,291
301,819
622,425
Other operating income/(loss), net
IT Services
15
2,150
(178)
2,165
(81)
(81)
Total Other operating income/(loss), net
15
2,150
(178)
2,165
(81)
(81)
Segment Result
IT Services
Americas 1
10,521
9,379
8,598
19,900
15,102
33,040
Americas 2
11,819
11,350
10,477
23,169
20,899
41,589
Europe
9,186
8,325
6,139
17,511
13,686
31,673
APMEA
3,028
3,066
3,078
6,094
5,624
11,476
Unallocated
(156)
56
203
(100)
951
5,153
Other operating income/(loss), net
15
2,150
(178)
2,165
(81)
(81)
Total of IT Services
34,413
34,326
28,317
68,739
56,181
122,850
IT Products
94
(53)
(301)
41
(178)
45
ISRE
393
475
109
868
3
1,061
Reconciling Items
20
(28)
10
(8)
(933)
(903)
Total
34,920
34,720
28,135
69,640
55,073
123,053
Finance expenses
(1,459)
(746)
(1,267)
(2,205)
(2,566)
(5,088)
Finance and Other Income
4,114
4,619
5,209
8,733
10,490
20,912
Share of net profit/ (loss) of associates accounted for using the equity method
(10)
7
(6)
(3)
25
130
Profit before tax
37,565
38,600
32,071
76,165
63,022
139,007
The Company is organized into the following operating segments: IT Services, IT Products and India State Run Enterprise segment (ISRE).
IT Services: As announced on November 12, 2020, effective January 1, 2021, the Company re-organized IT Services segment.to four Strategic Market Units (“SMUs”) – Americas 1, Americas 2, Europe and Asia Pacific Middle East Africa (“APMEA”).
Americas 1 and Americas 2 are primarily organized by industry sector, while Europe and APMEA are organized by countries.
Americas 1 includes Healthcare and Medical Devices, Consumer Goods and Lifesciences, Retail, Transportation and Services, Communications, Media and Information services, Technology Products and Platforms, in the United States of America and entire business of Latin America (“LATAM”). Americas 2 includes Banking, Financial Services and Insurance, Manufacturing, Hi-tech, Energy and Utilities industry sectors in the United States of America and entire business of Canada. Europe consists of United Kingdom and Ireland, Switzerland, Germany, Benelux, Nordics and Southern Europe. APMEA consists of Australia and New Zealand, India, Middle East, South East Asia, Japan and Africa.
IT Products: The Company is a value-added reseller of desktops, servers, notebooks, storage products, networking solutions and packaged software for leading international brands. In certain total outsourcing contracts of the IT Services segment, the Company delivers hardware, software products and other related deliverables. Revenue relating to the above items is reported as revenue from the sale of IT Products.
India State Run Enterprise segment (ISRE): This segment consists of IT Services offerings to entities/ departments owned or controlled by the Government of India and/ or any State Governments.
Reconciliation of Non-GAAP Constant Currency IT Services Revenue to IT Services Revenue as per IFRS ($Mn)
Three Months ended September 30, 2021
IT Services Revenue as per IFRS $ 2,580.0
Effect of Foreign currency exchange movement $ 31.0
Non-GAAP Constant Currency IT Services Revenue based on $ 2,611.0
previous quarter exchange rates
Three Months ended September 30, 2021
IT Services Revenue as per IFRS $ 2,580.0
Effect of Foreign currency exchange movement $ (13.6)
Non-GAAP Constant Currency IT Services Revenue based on $ 2,566.4
exchange rates of comparable period in the previous year
